PIPES Act of 2016 Signed into Law
The PIPES Act of 2016 was signed into law by President Obama on June 22, 2016. The PIPES Act, which is more formally known as the Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016, reauthorizes the Pipeline Safety Act through the end of September 2020. One of the top priorities of the Act is the requirement for the Pipeline and Hazardous Materials Safety Administration (PHMSA) to fulfill the mandates from the 2011 re-authorization.
The following is a recap of the main requirements of the PIPES Act of 2016:
The requirements of the PIPES Act of 2016 demonstrate a tone of increased accountability to not only the pipeline industry but also to PHMSA in their implementation and enforcement of safety regulations. Of the forty-plus directives given to PHMSA in the 2011 Act, PHMSA has only completed about half. The 2016 PIPES Act seeks to increase PHMSA’s accountability to Congress for the completion of the 2011 Act requirements, as well as the new requirements of the 2016 Act.
PHMSA Increases Maximum Penalties for Pipeline Safety Violations
On June 30, 2016, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published an Interim Final Rule in Volume 81, No. 26 of the Federal Register. PHMSA is revising references in its regulations to the maximum civil penalties for violations of the Federal Pipeline Safety Laws, or any PHMSA regulation or order issued thereunder. Under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, (2015 Act) which further amended the Federal Civil Penalties Inflation Adjustment Act of 1990, federal agencies are required to adjust their civil monetary penalties effective August 1, 2016, and then annually thereafter, to account for changes in inflation.
Effective on August 1, 2016, the maximum penalty rises to $205,638 for each violation for each day the violation continues, except that the maximum administrative civil penalty may not exceed $2,056,380 for any related series of violations.
|Violated Statute||CFR Citation||Current Maximum Civil Penalty||Revised Maximum Civil Penalty|
|49 U.S.C. 60101 et seq., and any regulation or order issued thereunder||49 CFR 190.223(a)||$200,000 for each violation for each day the violation continues, with a maximum penalty not to exceed $2,000,000 for a related series of violations||$205,638 for each violation for each day the violation continues, with a maximum penalty not to exceed $2,056,380 for a related series of violations.|
|49 U.S.C. 60103;
49 U.S.C. 60111
|49 CFR 190.223(c)||A penalty not to exceed $50,000, which may be in addition to other penalties under 40 U.S.C. 60101, et seq.||An administrative civil penalty not to exceed $75,123, which may be in addition to other penalties assessed under 49 U.S.C. 60101, et seq.|
|49 U.S.C. 60103;
49 U.S.C. 60111
|49 CFR 190.223(d)||A penalty not to exceed $1,000||A penalty not to exceed $1,194.|
The 2015 Act only applies to penalties prospectively and does not retrospectively change any civil penalties previously assessed or enforced.
Starting in January 2017, PHMSA is required to publish in the Federal Register annual inflation adjustments for each penalty levied under 49 U.S.C. 60101, et seq., and do so no later than January 15 of each year.
Under the Administrative Procedure Act (APA), Office of Management and Budget (OMB) Guidance, and the requirements of the 2015 Act, PHMSA in not required to follow the otherwise required process for public notice and comments prior to issuing this interim final rule.